Top Headlines
The Federal Reserve Keeps Interest Rates Unchanged, Meeting Market Expectations
The Federal Reserve announced its latest interest rate decision on June 12, maintaining the federal funds rate target range at 5.25% to 5.50%, in line with market expectations. Additionally, according to the Fed’s dot plot, out of 19 officials, four believe there should be no rate cuts in 2024, seven anticipate one rate cut, and eight expect two rate cuts.
Fed Dot Plot: Predicts Only One Rate Cut in 2024
The Fed’s dot plot indicates that by the end of 2024, the federal funds rate is expected to be 5.1%, down from 4.6% in March; by the end of 2025, the rate is projected to be 4.1%, down from 3.9% in March; by the end of 2026, the rate is forecasted to be 3.1%, the same as in March; and the long-term federal funds rate is estimated at 2.8%, up from 2.6% in March.
Market Update
As of the time of writing, according to Coingecko data:
BTC recent price is $68,219.04, with a daily change of +1.4%;
ETH recent price is $3,559.45, with a daily change of +1.7%;
BNB recent price is $619.10, with a daily change of +2.9%;
SOL recent price is $155.03, with a daily change of +3.8%;
DOGE recent price is $0.1462, with a daily change of +5.9%;
XPR recent price is $0.4916, with a daily change of +2.4%.
Policy
Federal Reserve Policy Statement: Slight Progress Towards 2% Inflation Target
The Fed policy statement mentioned “slight progress” towards the 2% inflation target (compared to the May 1 statement of “lack of progress”); cutting rates before having more confidence in sustainable inflation reaching 2% is deemed inappropriate; the economy continues to expand steadily, with strong job growth and low unemployment rates; reducing holdings of treasury bonds and mortgage-backed securities (MBS) will continue.
Powell: Confidence in Slowing Inflation Not Strong Enough for Rate Cuts Yet
Fed Chair Powell noted a recent slowdown in inflation data; more positive data is needed to boost confidence in the anti-inflation process; close attention is being paid to inflation risks; there is still no strong confidence in inflation slowing enough to warrant rate cuts this year.
Powell acknowledged significant progress in the U.S. economy regarding employment and inflation; inflation has moderated significantly but remains elevated; economic activity is expanding at a steady pace; GDP growth is expected to slow compared to last year; job growth remains strong but slower than in the first quarter; the FOMC expects the labor market to remain robust.
Powell emphasized that a significant factor in changing rate path forecasts is inflation; with a stagnation in the first-quarter inflation process, rate cuts need more time; due to the slowdown in inflation progress, the timing of rate cuts is delayed; data must illuminate the way forward; today’s inflation report exceeded almost everyone’s expectations; the FOMC now believes rates will not return to pre-pandemic levels.
The entire rate path is crucial, not just the first rate cut; the first rate cut is vital for the economy; the timing of rate cuts is an important decision for the economy.
Terraform Labs Agrees to Pay $4.47 Billion Fine to the SEC
Terraform Labs reached a settlement with the U.S. Securities and Exchange Commission (SEC), agreeing to pay a $4.47 billion fine. The SEC submitted a “proposed final consent judgment” on Wednesday, requesting approval from Judge Jed Rakoff of the Southern District of New York. According to the proposed judgment, Terraform will forfeit $3.58 billion in ill-gotten gains and pay a $420 million civil penalty, with its co-founder Do Kwon barred from serving as an executive or director of a public company. Do Kwon must also pay $204 million to compensate harmed investors. Earlier reports stated that on April 5, a New York jury ruled that Terraform and Do Kwon allegedly deceived investors in the sale statements of TerraUSD (UST), Luna, and wLUNA. Subsequently, the SEC motioned to recover $5.3 billion in ill-gotten gains and civil penalties. By the end of May, Terraform and its co-founder Do Kwon had “reached a preliminary settlement” with the SEC.
Blockchain Applications
PYUSD Now Live on the Injective Network
The Injective network has integrated PayPal’s stablecoin PYUSD, becoming one of the first Layer 1 networks to support stablecoins released by PayPal and Paxos. Users can transfer PYUSD from Ethereum and Solana to Injective, where dApps on the network can utilize PYUSD for fast payments, transactions, DeFi, and more.
Aethir Launches Decentralized Cloud Computing Network on Ethereum
According to a press release, the blockchain project Aethir is launching its decentralized cloud computing network on the Ethereum mainnet, aiming to leverage underutilized graphics processing units (GPUs) for intensive tasks like AI model training and gaming. The project recently raised $120 million in a token sale.
Figure Introduces Blockchain Private Loan Market Figure Connect
Figure Technology Solutions has launched Figure Connect, a blockchain-based private lending market designed to enhance market liquidity through standardized sales terms and documentation. The platform allows investors to commit funds before loan disbursement and uses blockchain technology for increased transparency and immutability, reducing repetitive third-party audits.
Currently, Figure Connect has two loan originators, The Loan Store and Movement Mortgage, as well as two loan buyers, Bayview Asset Management and Saluda Grade. Figure plans to create a TBA market similar to the mortgage markets of Fannie Mae and Freddie Mac, boosting liquidity and lowering rates through standardization and collateralization. Figure Chairman and Founder Mike Cagney is preparing for the IPO of Figure Technology Services and will serve as CEO of Figure Markets, an upcoming cryptocurrency and securities exchange.
Chainlink CCIP Protocol Now Live on Gnosis
Chainlink’s CCIP interoperability protocol and automated services have been launched on the Gnosis network. Gnosis users can leverage Chainlink to perform cloud computing functions and offload heavy computation tasks to the Chainlink network, reducing gas fees by up to 90%.
Cryptocurrency
Trump: Bitcoin Mining is the “Last Line of Defense” Against CBDCs
Former U.S. President Trump posted on Truth Social, stating that Bitcoin mining is the “last line of defense” against central bank digital currencies (CBDCs) and emphasizing that Bitcoin should be mined in the U.S. Following this statement, Bitcoin mining stocks rose on Wednesday.
TeraWulf stock surged nearly 20% to $4.13 and then fell back to $3.96, up approximately 14% from the previous day’s close. MicroStrategy and Hive Digital Technologies stocks each rose about 7% and 8%, respectively, while Iris Energy rose around 3%.
Biden Campaign Team in Talks to Accept Crypto Donations via Coinbase Commerce
According to sources, U.S. President Joe Biden’s campaign team is discussing accepting cryptocurrency donations through Coinbase Commerce. Coinbase Commerce is a payment service that allows merchants to accept payments in dozens of cryptocurrencies and has already facilitated crypto donations for Republican candidate Donald Trump’s campaign, which began accepting digital currency donations last month.
The discussions are part of Biden’s campaign team’s efforts to explore how to appeal to cryptocurrency supporters before the elections. A source mentioned that the team might be seeking sponsorship from well-funded cryptocurrency supporters. Another source working with political figures and crypto industry leaders stated, “They are paying attention to the issues in the crypto industry and trying to find quick ways to show support, they want to show they are not enemies.”
IBIT’s Trading Volume Exceeds $1 Billion Yesterday
According to HODL15Capital monitoring, data from the U.S. Bitcoin ETF showed that Grayscale GBTC had no inflows or outflows on June 12.
Additionally, IBIT’s trading volume exceeded $1 billion yesterday.
CryptoQuant: Bitcoin Transfers from Mining Pools to Exchanges at Two-Month High This Week
According to CryptoQuant’s report, as BTC hovers around $70,000, transfers from Bitcoin mining pools to exchanges reached the highest level in two months this week. With Bitcoin halving leading to decreased daily mining revenue, miners are looking to sell Bitcoin through over-the-counter (OTC) platforms to profit. On June 10, miners sold at least 1,200 Bitcoins, marking the highest daily trading volume in two months. Since early June, Marathon Digital has sold 1,400 Bitcoins worth $98 million. The report added that miners’ daily income has dropped by 55% from the peak of $78 million in March to $35 million.
io.net Market Cap Surpasses $500 Million, Reaching an All-Time High
According to the latest data, as io.net (IO) trends upward, its market cap has surpassed $500 million, currently reaching $539,750,385, setting a new all-time high. Additionally, IO’s trading volume in the past 24 hours reached $1,744,035,412, with the fully diluted market value (FDV) now exceeding $2.8 billion at $2,840,791,499.
Key Economic Developments
JPMorgan: Risks Exist in Expectations of First Rate Cut by the Fed in September
JPMorgan economists stated that Wednesday’s consumer inflation report and the Fed’s meeting increased the risk of a first rate cut in September, but their baseline prediction remains a rate cut in November. “Overall, while the median dot in this year’s plot was a bit of a surprise, we don’t have a fundamentally different view of the Fed this afternoon than we did this morning,” wrote JPMorgan’s Chief U.S. Economist Michael Feroli in a report. “We continue to think that the first rate cut will be in November, but the risks may now be tilting towards September rather than December after this morning.”
CME: Probability of Fed Maintaining Rates Unchanged in August at 91.1%
According to CME’s “FedWatch,” the probability of the Fed keeping rates unchanged in August is 91.1%, with an 8.8% chance of a 25 basis point rate cut and a 0.1% chance of a 50 basis point cut. The likelihood of the Fed maintaining rates in September is 38.3%, with a cumulative 56.6% chance of a 25 basis point cut and a 5.1% chance of a cumulative 50 basis point cut.
Fidelity International: Fed Unlikely to Cut Rates This Year
Salman Ahmed, Global Head of Macroeconomics and Strategic Asset Allocation at Fidelity International, emphasized his fundamental prediction of no rate cuts this year. The analyst stated, “If inflation continues to make progress through the summer or if labor market starts showing some signs of pressure, we do think the chances of a rate cut this year are increasing.” “However, the U.S. economy remains resilient, and today’s inflation data was impacted by sub-items like auto insurance and airfares, meaning the threshold is still high for initiating rate cuts.”
Nasdaq and S&P 500 Indices Hit All-Time Highs
The Federal Reserve maintained rates unchanged for the seventh consecutive time, with Powell stating it’s not yet the stage to announce rate cuts. U.S. stock indices closed with mixed gains, with Nasdaq up 1.53%, S&P 500 up 0.85%, and Dow down 0.09%. Both Nasdaq and S&P 500 hit all-time highs. Large-cap tech stocks mostly rose, with Tesla and Nvidia up over 3%, Apple up over 2%, setting new highs, rising over 6% at one point, surpassing Microsoft’s total market value; Microsoft rose over 1%, Netflix, Google, Meta slightly up; Amazon, Intel slightly down.
Golden Encyclopedia
What are Validiums?
Validiums is a Layer 2 scaling solution designed to optimize Ethereum’s performance by handling transactions off-chain. Validiums primarily processes most transactions off-chain and only sends succinct proofs for verification on the mainnet to reduce the load on the Ethereum blockchain. The off-chain transaction processing method significantly improves throughput and reduces mainnet congestion, resulting in a more efficient and economical Ethereum experience.
